Read below to find out how to receive free fitout contributions from landlords of $40,000 – $200,000 !!!
This is one of the most critical decisions for Franchisors and Franchisees as location of the business is a key success factor, especially for retail and food based businesses that depend on passing traffic or high visibility.
Some Franchisors take total control of site selection. They find and screen the site then offer it to a Franchisee. Others provide some site selection criteria to their Franchisee and tell them to find a site themselves but to submit their preferred site for approval before committing to a lease.
Special considerations may often apply to sites in shopping centres as the landlords are often powerful companies that command high rents and tough lease conditions.
A few issues to consider about site selection include:
- Importance of passing traffic & visibility
- Ease of access & safety for customers (eg location, parking, lighting, after hours access restrictions)
- Future developments in the area
- Proximity to competitors or complementary businesses
- Rents, outgoings and lease terms.
- Quality of landlord
- Adaptability of the site to evolve with your business
- Extent of capital works required to meet your specifications
FITOUTS – HOW TO GET $40,000 – $200,000 FROM THE LANDLORD
Nearly every new site requires a new fitout to meet branding and business requirements. Even mobile based franchises often require vehicles to have specific fitouts or signage.
Some Franchisors offer a Turnkey fitout service where they will organise the fitout. Others leave it to the Franchisees to organise themselves working to fitout specifications and using their own suppliers.
In the case of shopping centres or some commercial premises an arrangement can often be negotiated with the landlord for a fitout contribution or works. This may be offered as an incentive to new tenants or may be prompted by the Franchisee who see it as a way to reduce Bank finance requirements….in return for a slightly higher rent.
If you could get $40,000 – $200,000 fitout contribution from the landlord , imagine the difference that could make to your profits and ability to sell franchises.
There are specific ways to negotiate fitout contributions and specific ways to structure the leases and franchise contracts to ensure you, as Franchisor, can retain the fitout contribution, even if you onsell the business to a franchisee. We can teach you how to franchise the smart way and make the most of these large opportunities.
Fitouts can become a consuming exercise and if poorly managed can waste money and become a distraction to launch of the business. A common problem we have observed over the years is so much effort goes into fitting out the premises and making it look good but not enough planning or work goes into preparing for the launch and the critical first 6 month trading period that follows. If there are cost overruns from fitout this will often starve the new business of working capital or marketing budget and a poor start results.
CEO Consulting specialises in working with Franchisors and Franchisees to anticipate, plan for and manage the creation and launch of new franchise systems and businesses. Call us to discuss how we can help you avoid pitfalls and costs and ensure your business is set up for success, including access large fitout contributions from landlords.